Protect Your Family From Disasters With A Tidy Suite Of Insurance Policies

How Insurance Can Protect Your Future And Safeguard Your Family

If you are like the average citizen, you probably won't want to hear about insurance. It is one subject a lot of our people would rather give a distance because they think it has no place in their lives and businesses. Even when the law insists on insurance, as in the case of motor insurance, many citizens settle for the least that meets this requirement (the third party policy) and may even go for fake papers.

The objective of insurance is to protect the insured against the risk covered by the policy. Protection is taken in the sense that the risk gets transferred to the insurer, for the price of the agreed policy premium. By doing this, the insured literally buys peace of mind and actually eliminates the risk of financial loss that could otherwise prove very devastating.

Frequent Cases of Insurable Disasters
Naturally, disasters and devastating incidents are a regular feature of our daily lives. Consider this roll call:

• Fire outbreaks occur in virtually all major markets in Lagos and other commercial cities, almost with predictable regularity. Recall the imagery of wailing market men and women, hands on heads, watching their razed shops and goods, a common feature on TV news bulletins. If you attempt the calculation, you'll definitely be awed by the magnitude of losses absorbed by Nigerian small businesses, annually, knowing that most take no insurance. It is clear that many lives are set back each time, with some unlikely to recover from the impact, in a long time.



• The collapse of buildings, whether during or after construction is now also a regular occurrence. Most times, huge sums of money have been invested in these properties which, in a moment, get reduced to rubbles. If you calculate the cost in each case and estimate the total loss to the economy in one year, the figure will also stretch.



• In transportation, accidents are a permanent feature on our roads. The frequency and severity of damage is usually accentuated by the very poor state of the roads, where deathtraps adorn many spots. The consequence: numerous lives are lost, vehicles are written off and goods worth huge sums of money perish regularly.



• Armed robbery incidents have also taken their toll on the society. Many lives are taken out annually by hoodlums, leaving many families without their breadwinners. Many are dispossessed of their cars, goods and money. Business houses are robbed in the day or at night, inflicting financial losses that often incapacitate the businesses.

These samplers show how extensively disastrous accidents occur all the time. The truth is that we live with disasters and people experience them all the time. It may not happen to you, but somebody, somewhere grinds his teeth in the face of each major accident.

Q&A SERIES

Q. How much life insur-ance should I take?

A . Since the premium you pay depends on the value of the policy you take, you need to get your calculations right. Too little value reduces the premium but leaves your family without much. Too high would be fine for your family, but could mean serious financial strain to pay premiums and may lead to abandonement. If your employer has taken one for you, this may influence how much additional cover you take. So do the maths and ensure a meaningful, comfortable total cover value.

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A Heady Response
Strangely, Nigerians appear to accept the financial losses that go with serious accidents and disasters not just as a necessary part of existence, but as experiences whose impact must be personally borne and endured. This is even when insurance has been developed, over time, to help individuals and businesses protect against financial loss from disasters. Perhaps, it's easier to weep and wail and sit back to lick one's wounds.

In contrast, people have learnt in many other societies to transfer the risk of financial losses to insurers. That way, they hedge against disasters and secure their future.

Low Insurance Penetration
Relative to the population, size of the economy, level of risk and the absence of social security, it's surprising that so little insurance is taken. The myth that insurers do not settle claims may have contributed. Reports of claims settlements by insurers, published these days by the the Nigerian Insurance Association, show significant levels of claims payment. The ongoing recapitalisation of insurance companies will also boost their capacity to shoulder this obligation. Perhaps it is more enlightenment that will get the people to understand how insurance could help build a successful, secure future either for self or one's dependants.

Way Forward
For the individual or small business owner, it is time to know that you don't have to personally bear the full brunt of these disasters, should they occur. While you bemoan the occurrence of that disaster, wont it be a pleasant relief to remember that there is succour in the wings? Isn't it a healthy reassurance to know that whatever happens, you wont go down or be crippled financially, since indemnity is available. The insurance premium is an expenditure, but by every account, money well-spent. Don't leave yourself out in the cold. It's worth thinking about!

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